How the Civil War United Our Money

For years the U.S. relied on a chaotic system of notes issued by thousands of banks, until a divisive war gave birth to a unified banking system.

The Civil War changed the country more than any other event in U.S. history, and its echoes are very much with us yet in many aspects of American life. Even the paper money we use every day is a consequence of the war.

The Civil War affected all areas of American finance. It turned Wall Street into the second-biggest financial market in the world. It brought the first income tax into being (and with it, the forerunner of the IRS). The national debt rose from a trivial $65 million in 1860 to $2.7 billion in 1866. But...